Files and folders make perfect sense to someone who worked in an office 20 years ago. The office would likely have been furnished with cabinets full of literal folders containing paper documents.

I haven't used a file cabinet at work in over a decade. I still have a file drawer at my desk but there are no folders in it. So in that regard, familiarity with the concept is probably a lot lower than it used to be.

What probably makes more sense to users today would be tagging or labeling documents into categories. Could still be implemented as files, folders, and links, but the presentation might make more sense using other analogues.